ReachLocal Debuts Products To Bolster Online Commerce

Attempting to build on a lead-generation business nine years in the making, ReachLocal will roll out three products this year supporting local online commerce,
along with a site where consumers can instantly book home improvement services.

Lead management tool ReachSite, ecommerce support tool ReachCommerce, and target email and alert tool
ReachConvert will debut in North America during the second quarter and launch in the second half of this year.

The company also announced a new consumer offering, ClubLocal, the home
improvement service directory being tested in Dallas-Fort Worth since July 2012. The second beta market, San Francisco, will roll out in the second quarter of 2013.

The string of
ReachLocal platforms covers lead generation and search and social marketing, as well as online bookings and buying. ClubLocal provides the ability for consumers to book up to 17 home services online,
or via a mobile app.

Zorik Gordon, ReachLocal CEO, calls the change from a lead-generation business to marketing and support services an "evolution in the business model. Love them or hate
them, Groupon showed us an online company can support local services," he said.

All merchants participating in ClubLocal are pre-screened, complete with background check. Prices for services
are pre-negotiated. Once the guaranteed work is complete, consumers pay ClubLocal and all receipts and warranties are stored online in their account.

ReachLocal supports doctors, dentists,
plumbers and other small and medium-sized businesses, generating more than $450 million in revenue last year by supporting 22,000 customers in 12 countries on five continents.

ReachLocal
estimates the "need-based local services" market at more than $1 trillion, J.P. Morgan Analyst Doug Anmuth writes in a research note, with lead generation for the SMB market at around $43.5
billion in the U.S., according to Borrell Associates.

"We're encouraged by the high-margin nature of the products and the company's ability to drive growth and margin expansion over time,"
Anmuth writes.